[Digestion] WB News Release: Nepal Biogas Project

[Simon Fowler MADUR-SALES]

After the obvious failure of my last attempt to send the message, here is try number two (and counting!)

FOR IMMEDIATE RELEASE

News Release No. 2006/395/ESSD

Contacts:

Anita Gordon  +1-202-473-1799
Agordon at worldbank.org
Sergio Jellinek  +1-202-458-2841
Sjellinek at worldbank.org


Nepal Biogas Project: Reducing Emissions While Providing Community Benefits

Kathmandu, Nepal, May 3, 2006 - Small rural communities throughout Nepal will
reap the benefits of the carbon market with the signing today of an emission
reductions purchase agreement (ERPA) for the Nepal Biogas project.  This is the
first greenhouse gas emission (GHG) reductions project in Nepal under the Clean
Development Mechanism (CDM) of the Kyoto Protocol.

Taking into account that human-induced climate change is a global environmental
problem, the CDM allows OECD countries to fulfill some of their GHG-reduction
commitments through climate friendly projects in the developing world.

The project promotes the use of biogas as a commercially viable industry in
Nepal by expanding its use for cooking and lighting in rural households. The
biogas units will be sold at a non-commercial price to poor households and
displace fuel sources traditionally used for cooking—fuel wood, kerosene and
agricultural waste—with gas from the treatment of animal and human waste.  Each
household biogas unit can reduce almost five tons of carbon dioxide equivalent
annually.

“This project is a major breakthrough,” says Ken Ohashi, the World Bank Country
Director for Nepal.  “It is the result of years of painstaking work by
visionary Nepalis who saw that clean environmental practices would eventually
bring economic and social payoffs.  Hundreds of thousands of rural Nepalis now
stand to benefit not only from renewable energy sources for their homes and
communities, but a wide range of associated benefits in the areas of health,
sanitation, and agriculture as well.”

Along with the global benefits from GHG reductions, the involved communities
are benefiting immediately as a result of the reduction of workload for women
and children who will no longer have to collect firewood for cooking.  In Nepal
only 15 percent of the rural population has access to electricity.  The
dependence on fuel wood has contributed greatly to deforestation in the
country. Switching to biogas will help lessen the pressure on forests.

The project will also attach latrines to biogas plants, providing better
sanitation to rural households. Potential employment will add more than 15,000
people years for skilled people in the construction, maintenance, marketing,
and financing of biogas plants. The use of biogas for cooking will also mean
little smoke, resulting in better family health. In addition, the residual
biological slurry from the biogas plants can be used as a superior organic
fertilizer.

The project developer – Alternative Energy Promotion Centre, Nepal (AEPC) –
will sell a total of one million tons of greenhouse gas emission reductions to
the World Bank managed Community Development Carbon Fund (CDCF).

Dr. Madan Bahadur Basnyat, Executive Director of AEPC, said, “The Nepal Biogas
is the first CDM project in Nepal. We take pride in participating in the global
efforts to reduce GHG through this project.  The revenues from the carbon
credit sale will help us expand biogas plant installations to provide
affordable energy to more remote households of rural Nepal without depending
much on donor assistance.”

The Biogas Project fits into Nepal’s energy plans. The Nepali government has a
five year plan to improve energy access for the rural poor and to reduce rural
poverty by providing high-quality biogas plants to poor households at an
affordable price.  The expectation is that under Nepal’s Biogas Support
Program, about 200,000 of these plants will be installed over 8 years.

For more information please visit: www.carbonfinance.org

###

ANNEX 1:

The Kyoto Protocol and the Clean Development Mechanism (CDM)

The Kyoto Protocol provides an unprecedented opportunity for the Organization
for Economic Co-Operation and Development (OECD) countries to reduce greenhouse
gas emissions and at the same time help developing countries and economies in
transition invest in climate friendly technologies and infrastructure.   The
Protocol’s Clean Development Mechanism (CDM) and Joint Implementation (JI)
provide an element of flexibility for the industrialized countries to meet
their obligations under the Protocol to reduce greenhouse gas emissions by on
average 5.2 percent below their 1990 levels by 2010.   In so doing, the
Protocol provides an unprecedented incentive for those seeking lower cost
emission reductions, to leverage the flow of private capital and privately held
clean technology from North to South.

ANNEX 2:

The Carbon Finance Business

Carbon finance is the general term applied to financing seeking to purchase
greenhouse gas emission reductions (“carbon” for short) to offset emissions in
the OECD.   Commitments of carbon finance for the purchase of carbon have grown
rapidly since the first carbon purchases began less than 10 years ago.
Volumes are expected to continue to grow as countries that have already
ratified the Kyoto Protocol work to meet their commitments, and as national and
regional markets for emission reductions are put into place. Trading started in
the European Union in January 2005 with the Emissions Trading Scheme (EU ETS).

ANNEX 3:

The Community Development Carbon Fund (CDCF)

The CDCF is partnership of four governments and 10 companies and is designed to
provide communities in developing countries, and in particular least developed
countries with an opportunity to benefit from new investments in renewable
energy and clean technologies that aim to reduce greenhouse gas emissions and
mitigate the effects of climate change, while measurably improving the welfare
of the communities involved.



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